Tennessee Senate OKs scholarship cuts unless revenues rise

Tennessee Senate OKs scholarship cuts unless revenues rise

NASHVILLE -- The Senate approved legislation Monday that could slash lottery scholarships in half for several thousand college students in 2015 if proceeds from the games don't exceed this year's record-breaking net profits.

The Republican-sponsored bill passed on a mostly partisan 20-10 vote with Sen. Andy Berke, D-Chattanooga, and other Democrats questioning why the legislation even is needed.

The House version remains in committee and would have to pass both chambers in identical form before going to Republican Gov. Bill Haslam to consider.

The bill, sponsored by Senate Education Committee Chairman Delores Gresham, R-Somerville, changes requirements to obtain a $4,000 lottery-funded Hope scholarship, contingent on net lottery proceeds for education in each of the next three state budget cycles.

Under current law, students can qualify for a full Hope scholarship if they have a 3.0 grade-point average or score a 21 or above on their ACT.

The bill changes that to say that, beginning in the 2015-2016 academic year, students must have both a 3.0 GPA and score at least a 21 on the ACT. If they don't, their scholarships would be reduced from $4,000 to $2,000.

Home-schooled students only would have to meet the 21 ACT requirement and must score at least a 21 on two of the test's four parts.

Senate Republicans say the bill is necessary because the scholarship program has had to dip into its nearly $400 million reserve fund over the past two years.

When it was pointed out in committee that lottery net profits had hit $10 million, Gresham agreed to make the new requirements conditional on lottery revenues exceeding fiscal 2010-2011 net profits.

On Monday, the Tennessee Lottery Corp. announced that net profits this year have exceeded last year's figures by a record $22.4 million. That was due in large measure to recent frenzied buying of national MegaMillions tickets when its jackpot hit a half billion dollars, officials said.

Berke and other Democrats said they thought the measure would be $10 million, but Gresham acknowledged actual language in her amendment says lottery proceeds must exceed whatever the net increase is at the end of June 30 fiscal year.

"If anything below this record year ... even if we are currently turning a profit in the lottery and our proceeds more than cover our scholarship obligations, these changes would still go into effect," Berke said.

He also questioned the fairness of the break home-schoolers are getting compared to students in traditional public schools, public charter schools and private schools.

Senate Minority Leader Jim Kyle, D-Memphis, said, "Ladies and gentlemen, we're close to $400 million [in reserves] in a program, trying to figure out who's not to get a benefit," adding proponents were "figuring out why the ship is sinking when it's not sinking."

Gresham said lawmakers "must prepare for the future," noting that Lottery Director Rebecca Hargrove said high gasoline prices could have a "depressive effect" on lottery proceeds.

In response to criticism from another Democrat that poorer students would be most affected, Gresham pointed out the bill increases needs-based college scholarships by $10 million a year over the next decade.

The state must prepare for the future, Gresham said, likening the issue to the "classic Aesops fable ... the grasshopper and the ant."

In other legislative action Monday night senators voted 21-9 on legislation that seeks to amend the Tennessee Constitution to change the way appeals court judges are selected.

Republican Senate Majority Leader Mark Norris of Collierville's resolution would enshrine the state's current practice of first appointing the judges and then having yes/no retention votes.

Many Republicans maintain the current appoint/retention process is not allowed by the state constitution, although it has been upheld by a special state Supreme Court.